Forex Analysis for Thursday 25th May 2017
– FOMC minutes show the Committee thought it was prudent to wait for further evidence that recent weak data was transitory before hiking again.
– Fed staff presented a plan to set gradually increasing limits on balance sheet reinvestment that would start low and be raised every 3 months until fully phased in; nearly all Committee members viewed the proposal as favourable.
– USD and treasury yields backed up following the release as the Fed sounded a little more uneasy about the domestic economic outlook (although it suggested that the assessment of the economy had changed little since the March policy meeting) and no real detail was given on balance sheet normalisation.
In Canada, the Overnight Rate was kept at 0.5% as per expectation.
The USD dropped on the more cautious Fed tone. The S&P500 broke through the 2400 level and closed above it for a new all-time high. Oil was essentially flat and gold rose. The US 10 Year Treasury yield dropped a little and the JPY was essentially flat. This adds up to a slight move towards risk-off. The Dow30, Nasdaq and FTSE100 were also up but other indices were rather static. The EUR appears to be consolidating and the GBP grinds downwards. The commodity currencies remain rangebound.
UK Second Estimate GDP; OPEC Meetings.
VIP Club members please [mepr-login-link] to access your Daily Alert video.
For VIP Club members, this commentary is augmented with a short daily video where I discuss the trades I am in and the opportunities for tomorrow. If you would like a free one month trial to the VIP Club you can find out more HERE.
Here is your Daily Alert video. Trade talk starts at 3:40.
You can download the video HERE. If it starts to play in your browser, right click on it and select “save video as” or similar and it will download to your machine.
There is an archive of all VIP Club member’s content on the VIP Club page.